Saturday, January 16, 2010

A friend sent me a link to the article by Lawrence Solomon titled "Better off with Bing" (1/16/2010 FP Comment). The article is about Google's own censoring of certain topics for the worldwide users, which many call "Googlegate", and Mr. Solomon uses "climategate " as an example. He contends that Bing, Microsoft's search engine, returns 'uncensored' results as opposed to Google.

That got me curious, so I searched "climategate" on Google, Yahoo, and Bing. Here's the result tonight:

By the way, if you google "googlegate", the search returns 29,700. If you use Bing, the search returns 82,700,000. So for Microsoft, "googlegate" is a far bigger deal than "climategate". (That's so Steve Ballmer.)

I don't normally use Bing, so I am not familiar with its quirkiness if any. But I have suffered through Microsoft's products over the long years, and I don't want to use anything coming out of that company if I have an alternative. And "google" is a verb now, while "bing" isn't.

"The World Health Organization (WHO) is considering a plan to ask governments to impose a global consumer tax on such things as Internet activity or everyday financial transactions like paying bills online.

"Such a scheme could raise "tens of billions of dollars" on behalf of the United Nation's public health arm from a broad base of consumers, which would then be used to transfer drug-making research, development and manufacturing capabilities, among other things, to the developing world.

"The multibillion-dollar "indirect consumer tax" is only one of a "suite of proposals" for financing the rapid transformation of the global medical industry that will go before WHO's 34-member supervisory Executive Board at its biannual meeting in Geneva.

"... WHO's so-called Expert Working Group has also suggested asking rich countries to set aside fixed portions of their gross domestic product to finance the shift in worldwide research and development, as well as asking cash-rich developing nations like China, India or Venezuela to pony up more of the money." (The article continues.)

UN/WHO wants rich countries (i.e. developed countries who are not so rich any more) to set aside fixed portions of GDP to give to the poor countries under the guise of "global medical research and development". But that's not all. UN/WHO wants to tax citizens of the world, just about all of them.

How? This is from the executive summary of the scheme by WHO Executive Board, dated December 23, 2009 (page 9):

a 10% tax on the international arms trade market, which might net about $5 billion per annum

a digital tax or 'bit' tax [Fox article misquotes it as 'hit' tax]: Internet traffic is huge and likely to increase rapidly; this tax could yield tens of billions of U.S. dollars from a broad base of users

Brazil's financial transaction tax: a tax on bank account transaction, set at 0.38% levied on paying bills online and major withdrawals, it was raising an estimated US$20 billion per year and funding some 87% of the Government's key social protection programme, before it was voted down [Good for Brazilians to vote that down!]

UNITAID airline tax: an international solidarity micro-levy is well accepted by the public and causes no economic distortion [Solidarity levy on airline tickets raises almost all US$300 million UNITAID revenue.]

'Bit' tax proposal is nothing new. Back in 1999 during Clinton Administration, UN/WHO proposed the 'bit' tax to levy 1 cent per every 100 emails sent. They are at it again, and this time they may get away with it, at least in the U.S. where the proposals to tax every trade on financial instruments (stocks, options, futures, derivatives, etc.) and to tax the liabilities of nation's top 50 financial institutions are being considered and may be gaining support among the naive Congress who seem to think striking such a populist image would win them the support from their constituents. Both proposals are absurd, and will end up punishing the purported victims to be saved (i.e. the general public).

So, for the sake of transferring further wealth from developed and rich developing countries to the poor countries, everyone in the world who has Internet access and/or email account can be taxed. If your email account is hacked and someone is sending a million spam mails from your account, good luck to you. If you withdraw a chunk of money from your bank, you will be taxed. If you pay your bill online from your bank account, you will be taxed. If you fly, you will be forced to show international solidarity by paying additional airport tax.I do not like the fact that these are being proposed by a supra-national organization like UN and WHO. IMF, another supra-national organization, has already floated the idea of global financial transaction tax. INTERPOL, whose U.S. branch is located within the U.S. Justice Department, now has full diplomatic immunity within the U.S. soil, thanks to President Obama. Though rebuffed for now, the Obama administration is pushing the new tax on financial institutions to be adopted worldwide. There is some uneasy theme here, isn't there?

Will it ever stop? We the proverbial frogs in a pot are being boiled very quickly and the heat are getting too uncomfortable. Will we able to stop this insanity?

Massachusetts' special election on January 19 to fill the Senate seat of Ted Kennedy is turning out to be a "make or break" deal for the administration's health care "reform".

Scott Brown, the Republican candidate who trailed the Democratic candidate Martha Coakley by as much as 34 points in November, is now ahead in a poll by 4 points.

There are 60 Democrats in the Senate, one of them is the interim Senator from Massachusetts. If Mr. Brown wins, Democrats will lose super-majority in the Senate. And so the scramble has begun.

First, it was Secretary of State William Galvin, Massachusetts' top election official, who said on Wednesday certifying the election results could take weeks. (This, by the way, is the same official who was quite willing to bend the state's certification rule in 2007 so that the fellow Democrat could be quickly swear in to override the presidential veto.) During those "weeks", the Democratic interim Senator would be in the Senate, ready to vote for the health care "reform" bill.

Then, as expected by many opponents of the health care bill, Chris van Hollen, a top Democrat in the House declared that the Senate could use "reconciliation" to pass the bill with a simple majority of only 51, despite the Senate Majority Leader Harry Reid's pledge in November that he wouldn't use the reconciliation process for the health care bill.

51% of people in Massachusetts oppose health care bill as proposed by the Obama administration and the Dem Congress. Nationally, 55% oppose (45% strongly oppose) vs 40% favor (19% strongly favor), even though 54% are resigned to the eventual passage of the bill. (Source: Rasmussen Report on health care reform, 1/11/2010)

I'm curious to see if the president can turn the Coakley's campaign around. Democrats must be hoping that his failed Chicago Olympic bid, his Asian tour that achieved little to nothing other than producing tons of carbon dioxide, and Copenhagen snub by China and India (and Russia too, by the way) are just aberrations.

I have no particular love for Brown. Nor do I hold any for Coakley. However, I am certainly tired of the Obama agenda. Bear in mind I hated the Bush agenda, too. I am probably doomed to be unhappy with presidents of either party.

I want a fiscal conservative, small government, small military, mind our own business agenda. That is the Libertarian platform but they seldom have a chance.

I voted for Ron Paul (a Libertarian currently masquerading as a Republican).. Nonetheless, I thought Obama would do some things right. I thought wrong. I have agreed with almost nothing he has done.

Right now, the way to stop his agenda cold turkey (and cold turkey seems to be the only thing clowns from either party understand), is to cram a vote down their faces.

A vote for Brown is a vote that will without a doubt a message down President Obama's throat that he better change his tune or he will be a one-term flash in the pan.

Friday, January 15, 2010

The so-called health care "reform" as proposed by the administration and the Democratic Congress, which should be really called "the plan to force people to purchase health insurance plans at inflated price for the reasons known only to the politicians", is "on" again after all, because powerful labor unions are "on board" again after winning a major concession after the Wednesday's negotiation at the White House (what a surprise).

Under the concession, labor union members will be exempt from the so-called "Cadillac tax" (40% tax) on high-cost health care plans until 2018. The deal is worth $60 billion, and it will reduce the amount to be raised by "the Cadillac tax" from about $150 billion to $90 billion.

Why would labor unions care about "Cadillac" insurance plans (i.e. plans valued at $8,900 or more for individuals and $24,000 or more for families)? Because many of the plans for their members do fall into that category - older workers and women.

In 2008, the union membership rate for public workers was 36.8%, while the membership rate for private workers was 7.6%. The national average was 12.4% for all workers. Of public workers, the local government workers (teachers, librarians, fire fighters, police) had the highest membership rate at 42.2%. (Source: Bureau of Labor Statistics Union Member Summary, January 28, 2009)

So, this concession mostly benefit unionized public workers, particularly the government workers. Non-unionized, private-sector workers will get to pick up the tab in one form or another. It will make a nice gimmick to encourage more private workers to join the union or form a union at their workplace.

(Let me suggest how they would fill the gap of $60 billion: tax cosmetic surgeries (botox, hair transplant, etc.) done for the members of Congress at 100%.)

The Obama White House made concessions to the pharmaceutical industry and health insurance industry, and now the labor unions.

What are the concessions to the rest of us? Anything? (I'd love to have the right to not participate.)

Thursday, January 14, 2010

Not the bankers, not even the politicians and bureaucrats. It's the monetary system and the Federal Reserve.

"Fraud is in the money. It's fraudulent to steal from people by diluting the value of the money, debasing the currency is the big fraud, which destroys the economy and takes away the jobs and puts the burden of inflation on the little people... Everybody is cheated when you have a fraud inthe monetary system."

Wednesday, January 13, 2010

Zimbabwe is a poster child for hyperinflation (the other one being Weimar Republic), always cited by inflationists as a warning of what could happen if the fiat money printing doesn't stop. But while the rest of the world keeps focusing on that aspect, the country has clearly moved on, to a debt-free, central-bank-free, free-market capitalism that provide jobs, feeds and clothes its citizens much better than the system they had had.

"HARARE (AFP) – Zimbabwe's gold production surged 35 percent to 4.2 tonnes last year in a "remarkable recovery" for the mining sector despite erratic power supply, the Chamber of Mines said Monday.

"The 2009 figure was up from 3.1 tonnes the previous year, it said.

"It was a remarkable recovery for the gold and mining sector in general," Chamber of Mines chief economist David Matyanga told AFP.

""However the recovery process within the gold and mining sector in general was affected by the erratic power supply and the critical shortage of working capital," he said.

""The operating environment last year greatly improved when compared to the previous year," said a manager at foreign-owned mine who did not want to be identified.

""Last year we got a loan to revive some of our operations and expand operations which was something that could not be heard of in 2008 or 2007," the manager said." (The article continues.)

This encouraging story is made possible by the demise of the central bank in Zimbabwe.

The central bank effectively ceased to exist. No more lender of last resort. No more printing money at the behest of politicians. Zimbabwe allowed multiple currencies (U.S. dollar, Euro, British Pound, South African Rand) to circulate freely. Now, prices of money and goods are set by a free market. Price control and forex control are gone. Money flows freely into and out of the country. Shelves at markets are full again, people can feed and clothe themselves again. Zimbabweans who fled to neighboring countries to escape poverty and famine caused by astronomical inflation are returning.

Best of all, the country is debt-free, probably the one and only in the whole world. Government and private debt in old Zimbabwean dollar was repudiated. President Mugabe is still there, but it is hoped that he won't last very much longer (he is 85).

I read about the amazing transformation of Zimbabwe in this article posted at Kitco.com back in November last year:

Now the once-mighty gold mining industry in Zimbabwe is coming back, despite power shortage and shortage of working capital. All thanks to the death of their central bank, and return of a free-market capitalism.

10-member Financial Crisis Commission headed by the ex-State Treasurer of California (well that gives a lot of credibility to the Commission, doesn't it?) is holding a hearing on Capitol Hill today and tomorrow.

Comments from people watching the proceedings are those of disappointment and sarcasm. The 9-11 Commission seems to come to most people's mind - i.e. grand-standing with no substance.

It's quite telling, to me, that the ex-banker (Merrill Lynch) sits right next to the commission chair and asks totally inane questions like why Goldman Sachs didn't offer to take less than 100 percent in payments from AIG.

Where does Brooksley Born sit? She sits at the end. She's about the only one in the commission that has credibility. I would have believed more in the seriousness of this commission if she were the chair.

Wall Street CEOs were "grilled" in the morning, and now it's financial analysts' turn. But did the Commission invite those analysts and economists who had long predicted the financial crisis that finally hit in September 2008? People like Peter Schiff and Meredith Whitney?

For those of you like me who don't have TV anymore, you can watch the hearing live on C-SPAN on the Internet.

If you want to let the Commission know how you feel about the hearing, you can write to them. (I was thinking of filling the comment section with "LOL LOL LOL LOL.....")

In one of the episodes of BBC's excellent comedy Yes Prime Minister, Sir Humphrey Appleby the Cabinet Secretary advises the novice Minister Jim Hacker thus: When we don't want to find out about anything, we form a committee.

"Argentine President Cristina Kirchner's firing of the country's central bank president last Wednesday has provoked a constitutional crisis, not unlike the one that rocked Honduras last summer. As with then-Honduran President Manuel Zelaya, Mrs. Kirchner has tried to run roughshod over her nation's laws. She blithely ignored legal protections of bank independence.

"Not surprisingly, central banker Martín Redrado refused to go and challenged her reason for sacking him: his refusal to hand over to her $6.6 billion in bank reserves.

"In response, Mrs. Kirchner issued a decree to amend the bank's charter so that she could push Mr. Redrado out "legally." A federal judge then issued an injunction in favor of Mr. Redrado, and on Friday he returned to his bank post. The same judge froze the bank's reserves so Mrs. Kirchner couldn't take them. The constitutional battle lines were drawn.

"Mrs. Kirchner's insistence that the central bank's assets should be at her disposal is noteworthy. It reflects a primitive view, not unknown even in the U.S., that the role of a central bank is to print money for the government's use. Yet it is nonetheless surprising that even after the nation has suffered so much inflationary agony, it is still possible for an Argentine politician to pursue this line of reasoning without risk of being tarred and feathered." [emphasis is mine] (The article continues.)

Primitive, maybe, but that's exactly what the first central bank was set up for: to print money for the government's use, and that government was Britain in 1694. The reason why a politician like her is not "tarred and feathered" is because the general public remain ignorant of how the monetary system works. Many people, including Venezuela's Chavez, believe more money, however fiat, means wealth.

To be precise, "bank reserves" that the above article talks about is not the required reserves or excess reserves that you see on the Federal Reserve balance sheet but "foreign exchange reserve". "Mr. Redrado [central bank governor] argues that Congress should decide on whether the payment should be made and says he is defending the bank's independence." (Argentina's Bad Timing by Richard Barley, 1/12/2010 Wall Street Journal)

Maybe what we are witnessing in Latin America is the beginning of of an end of the central bank franchise and of fiat money. For now it's a wishful thinking on my part.

But in Venezuela, Mr. Chavez believes he can force the price to stay low, while he basically doubles the money supply. In the U.S., Mr. Bernanke has doubled the monetary base which could more than double the money supply, and he has been buying up agency bonds and MBS at the behest of the Obama administration to force down the mortgage rates.

In Argentina, Ms. Kirchner thinks the nation's banks including the central bank are her checkbook account to pay for her pet government projects. In the U.S., President Obama is reportedly thinking about a levy on financial institutions to replenish TARP fund and to help balance the budget. Not even a lip service to cutting government spending here. (See the story from AP.)

Now the difference between the U.S. and "primitive"-thinking Venezuela and Argentina is getting very cosmetic.

About my coverage of Japan Earthquake of March 11

I am Japanese, and I not only read Japanese news sources for information on earthquake and the Fukushima Nuke Plant but also watch press conferences via the Internet when I can and summarize my findings, adding my observations.

About This Site

Well, this was, until March 11, 2011. Now it is taken over by the events in Japan, first earthquake and tsunami but quickly by the nuke reactor accident. It continues to be a one-person (me) blog, and I haven't even managed to update the sidebars after 5 months... Thanks for coming, spread the word.------------------This is an aggregator site of blogs coming out of SKF (double-short financials ETF) message board at Yahoo.

Along with commentary on day's financial news, it also provides links to the sites with financial and economic news, market data, stock technical analysis, and other relevant information that could potentially affect the financial markets and beyond.

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